Federal Reserve Banks make a record profit.

[SteamWake]

File this under things that make you say Hrmm ...

Federal Reserve Banks turn a record profit in 2009

http://www.foxnews.com/politics/2010/01/12/federal-reserve-makes-record-billion-profit/

So thats where that stimulus money ended up. :o

[mookiemookie]

Apparently they earned a lot of interest on the toxic assets they took off the banks' hands. The question is what is the true market value of that garbage they have on their books? I suspect a lot of that "profit" would be wiped out if they had to mark to market.

[CaptainHaplo]

"...bigger profit was primarily due to increased income from the securities it held last year.
Such income went up as the Fed's holdings of securities mushroomed."

Like any stockholder, they are due the dividend that is paid. On bonds - they are paid the interest on the bond, just as you or I would be. Nothing suprising here, since the amount of holdings they had increased dramatically, the payments they recieved would increase as well. Simple math.

Had this been inrelation to the "toxic assets", there would have been no interest. The assets were toxic because there were no payments being made - no payments mean no interest profit....

[Lt.Fillipidis]

In addition to all that, lets not forget that a huge percentage of that sum is only in electronic form and not on cash.
Personally i cant rely on electronics.

[mookiemookie]

Had this been inrelation to the "toxic assets", there would have been no interest. The assets were toxic because there were no payments being made - no payments mean no interest profit....

Not necessarily. Some of the "toxic assets" in MBS land have performed better than expected.